Nigeria: PenCom Targets Informal Sector with Revamped Micro Pension Plan

The National Pension Commission (PenCom) has unveiled a series of transformative initiatives to expand the reach of its Micro Pension Plan (MPP) and capture the 77.5 million workers in Nigeria’s informal sector.

This was disclosed by PenCom’s Acting Director General, Ms. Omolola Oloworaran, during her keynote address at the Micro Pension Plan Industry Stakeholders’ Engagement Forum in Lagos, organized in collaboration with the Pension Fund Operators Association of Nigeria (PenOp).

Key Transformative Strategies

Oloworaran outlined the commission’s strategy, which focuses on four pillars: market segmentation, rebranding, robust technology, and incentives.

• Market Segmentation: The MPP will be tailored to meet the diverse needs of informal sector groups, ensuring its appeal to traders, artisans, small-scale farmers, transport operators, and other self-employed professionals.
• Rebranding: PenCom plans to revitalize the MPP with a new name and identity to better resonate with its target audience and drive broader engagement.
• Robust Technology: In collaboration with fintech and telecommunications companies, PenCom will develop a user-friendly digital platform for seamless contributions and withdrawals. Drawing inspiration from successful pension models in Kenya, Rwanda, South Africa, and Botswana, the platform aims to scale accessibility and convenience.
• Incentives: The commission is exploring options to offer tangible benefits, such as microloans or health insurance, to encourage participation in the plan.

A Vision for Transforming Lives

Speaking on the theme, “Reimagining Micro Pension Plan,” Oloworaran emphasized that the MPP represents more than just a policy—it is a tool to provide financial security, dignity in old age, and a pathway out of poverty for hardworking Nigerians.

“The informal sector, comprising over 77.5 million Nigerians, forms the backbone of our economy. Yet, many in this group lack any form of financial safety net, leaving them vulnerable to economic shocks in their later years,” she stated.

The MPP is designed to address this gap by enabling informal workers to save small, manageable amounts over time. These savings create a financial buffer for the future, helping alleviate poverty.

Economic Impact and Wealth Creation

Oloworaran highlighted the broader economic implications of the MPP, noting that pension funds under management are currently yielding an average return of 14%.

“This plan is not just about savings; it’s about wealth creation,” she said. “The MPP empowers millions of Nigerians to transition from economic vulnerability to financial security. Families with stable retirement income can afford better healthcare, keep their children in school, and even invest in small businesses. The ripple effect is transformative.”

With the implementation of these strategies, PenCom aims to ensure that the MPP becomes a powerful tool for economic empowerment and social security, transforming the lives of millions in Nigeria’s informal sector.